Challenge on Service Tax Liability on "Event Management Service": Supreme Court Allows Exemption Application in HT Media's Tax Appeal [Read Judgment]

The Supreme Court of India, in a Civil Appeal filed by HT Media Limited against the Principal Commissioner of Delhi South Goods and Service Tax, has concluded hearing arguments on a challenge related to service tax liability.

A bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan heard the counsel for both parties at length on November 6, 2025. Following the conclusion of arguments, the court has reserved its judgment, indicating that a final decision will be delivered at a later date.

The court also allowed an exemption application filed by the appellant and directed both parties to file their respective written submissions, along with supporting case law, within two weeks. A specific procedure was outlined, requiring the appellant's counsel to file and share their submissions first, after which the respondent's counsel will file theirs.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, has partly allowed an appeal filed by M/s. HT Media Ltd. against a service tax demand order passed by the Commissioner of Service Tax (Adjudication), New Delhi. The appeal challenged demands related to several service categories for the period 2006-07 to 2011-12, including Event Management, Management Consultancy, and Business Support Services, along with associated interest and penalties.

Regarding the "Event Management Service" demand, the tribunal upheld the liability on HT Media, ruling that the foreign agents engaged to book prominent speakers for the appellant's annual summit fell within the definition of "event managers." Consequently, the service tax was correctly levied on a reverse charge basis.

However, the tribunal modified the demand, holding that it was sustainable only for the normal limitation period, as the legal position on reverse charge was a subject of litigation and not a case of willful suppression by the appellant.

On the "Management Consultancy Service," the tribunal ruled in favour of HT Media, accepting their contention that they had acted as a "Pure Agent" while procuring goods and services for M/s. H.T. Burda. The tribunal found that the appellant met all the conditions under Rule 5(2) of the Service Tax Valuation Rules, and therefore, the related tax demand was set aside.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The tribunal also quashed the demand under the "Business Support Service" category, agreeing with the appellant that the receipts from group companies were merely reimbursements for expenses incurred in a common pool and proportionately shared.

It was held that this cost-sharing arrangement did not constitute a taxable service provided by one associate to another. Furthermore, the tribunal set aside the interest liability on delayed payments for services to associated enterprises, stating that the amendment to the explanation under Section 67 of the Finance Act could not be applied retrospectively to book entries made prior to the amendment date.

In its final order, the CESTAT disposed of the appeals by confirming the service tax liability only for the "Event Management Service" for the normal limitation period. All other demands pertaining to Management Consultancy, Business Support Service, interest, and the penalties imposed under various sections were set aside.

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